Retail loyalty system (RLS) with embedded web server

ABSTRACT

A Retail Loyalty System for retailers to create and sustain customer loyalty and repeat purchases, that is layered over the Internet, and utilizes the Smart Card technology to store the loyalty points and personal information; built-in Ethernet and TCP/IP Network Interface and built-in Embedded Web Server allow web-based administration; a network terminal allows the shoppers to check their loyalty points in real-time manner, and allows the shoppers to select the reward items to redeem on the LCD display with touch-screen panel; a POS Add-in Module to allow adding the loyalty points earned by the purchase transaction, and to allow deducting the loyalty points resulted by redeeming reward items. The reward scheme may be updated &amp; readjusted remotely by the computer at the head office via the Internet, and may be synchronized across all the branches of the retailer. Optionally, all the transaction logs can be uploaded to a centralized CRM database server for CPM (Customer Relationship Management) purpose.

BACKGROUND OF THE INVENTION

[0001] 1. Field of the Invention

[0002] The invention relates to Internet devices for retail industry andmore particularly, to such devices that enable retailers to implementlow-cost loyalty program and collect shoppers' information with smartcard technology.

[0003] 2. Description of the Related Art

[0004] In today's highly competitive business environment in retailindustry, retailers have been using different loyalty programs to createand sustain customer loyalty. These programs, such as loyalty points,coupons, and sweepstakes, have been used for many years to encouragecustomers to purchase.

[0005] Although the advance in technology has enabled retailers toenhance and automate many of their daily operations, however, mostretailers are still using a variety of traditional low-tech approachesto implement the loyalty programs, and those traditional approaches posemany problems.

[0006] The most common implementation of the retail loyalty programtoday is to issue clumsy paper-based loyalty cards to the shoppers. Astamp (or sticker) is added to the card for every certain amount ofmoney spent in the retail store. Once a shopper has accumulated acertain number of stamps (i.e. loyalty points) within a certain periodof time (e.g. within 3 months), the shopper may use the loyalty card toredeem some gifts, or to get discount on the next purchase.

[0007] This approach is in general a low-cost approach. Despite thislow-cost advantage, however, the paper-based loyalty card is notoriousfor its easily-wear-and-tear characteristic. Once it starts to wear, theshopper will no longer be willing to carry it along while shopping, andwill not stick to the program anymore.

[0008] Also, it is difficult and very costly to avoid forgery stamps andstickers, The procedures of adding stamps and stickers are donemanually, and it is easy for the retailer's staff to issue forgerystamps and stickers to someone's loyalty card.

[0009] Alternatively, some retailers may have used more advanced way inreplacing the paper-based loyalty card with plastic magnetic swipe card.Although this approach does not suffer from the above wear-out problem,however, due to the limited memory in the magnetic card, a centralizeddatabase must be kept and maintained to record all the customers'transactions and loyalty points. These centralized databases areexpensive to operate and maintain, and most small to medium sizedretailers cannot afford the costs.

[0010] Another disadvantage with the limited memory in the magnetic cardis that it cannot be used to store shoppers' personal information, suchas name, sex, age, and the shopping habits. And again it must rely onthe centralized database, which makes it difficult for the retailers toimplement the Customer-Relationship Management (CRM) programs.

[0011] Both approaches discussed above usually require the shopper tospend at least a 1;5 minimum amount of money (such as $100) to get oneloyalty point. Therefore, it is difficult for retailers that due mostlywith small-amount transactions, such as those 24-hours convenientstores, to implement the program. It would be impractical to ask theretailer to adhere a sticker to the shopper's loyalty card for everysingle dollar the shopper spends.

[0012] Another drawback with these traditional approaches is the smallvolume of participants, It is usually difficult for retailers to recruitenough participants in store to justify the loyalty program. It isbecause under most cases, the shopper needs to provide much personalinformation, such as name, age, martial status, social insurance number,address, telephone number, and so on, before the shopper can participatethe loyalty program. These inevitably engenders privacy issues, and mostshoppers are reluctant to provide the information before they haveenjoyed the benefits of the loyalty programs.

[0013] The reward schemes of these loyalty programs are usuallypreprinted on the loyalty cards, and the retailers do not have theflexibility to alter the schemes to adapt for any product specificpromotion, seasonal campaign and time-sensitive promotion.

[0014] Under these traditional approaches, it is very difficult andinconvenient for shoppers to get their updated loyalty points. Often ashopper needs to call the customer hot line and ask the operator for thepoint balances. Alternatively, some retailers may use the web-basedapproach, such as allowing shoppers to get their loyalty points on theirown with web browser via the Internet. This approach are also cumbersomeand requires specialized knowledge to use effectively, and will alienatetechno-phoebes (such as the ciderly), introduce learning curve, andengender privacy issues.

SUMMARY OF THE INVENTION

[0015] The invention provides a flexible, interactive, low-cost, smartcard-based Retail Loyalty System (RLS) solution for retailers, that islayered over the Internet. The system enables retailers to rewardshoppers for their patronage and encourage repeat purchases byimplementing a point-based reward system.

[0016] The system is easy for retailers to implement, and convenient forshoppers to use. The system does not require any expensive centralizeddatabase infrastructure, and does not require costly maintenance andsupports. Retailers may at any time change the reward schemes amongtheir branches to cope with the seasonal and time-sensitive promotions.Shoppers may conveniently review their loyalty points and shoppinghistory, and interactively select the redeemable gifts, without any needto ask for assistance while they are enjoying their shopping in thestores.

[0017] The Retail Loyalty System consists of a number of networkterminals in each retail store. The network terminal is preferably awall-mounted unit with small footprint, and with a small display unit,preferably a 6.5″ LOD monitor, to display the shopper's personalinformation. During the idle time, the network terminal may also displayadvertisements and promotion materials, in short-movie or instill-picture form, through the display unit.

[0018] The retailer issues a loyalty card to each shopper whoparticipates in the loyalty program. The loyalty card may be acontact-type smart card, or preferably a contactless-type smart card.The loyalty card stores the accumulated amount of money the shopper hadspent in the store, and the associated loyalty points. It alsooptionally stores some of the recent transactions history.

[0019] Depending on the reward scheme, a shopper is entitled to acertain loyalty points for every certain amount of money spent in thestore. When the shopper has completed a purchase, the entitled loyaltypoints will be added to his/her loyalty card, and optionally with theinformation of this purchase, such as the date, time, items and amount,through the Point-Of-Sale (POS) terminal at the cashier.

[0020] In any case, shoppers carry their own loyalty cards that storethe loyalty points. Therefore, it is no longer necessary for retailersto keep the loyalty point records of their shoppers in centralizeddatabases, and thus avoid the costly setup and maintenance costs.

[0021] Shoppers may at any time present their cards to any networkterminals in the stores, and the network terminal will read the card,and instantaneously feedback the loyalty points balance of the shopperon the display, plus the list of the recent purchase history Inaddition, the relevant redeemable items the shopper is entitled to arealso displayed. The shopper may thus interactively select some or all ofthese redeemable items through the touch-screen display, and presenthis/her card again to record these selected items for later redemption.

[0022] The network terminal may also enable personalized promotion bydisplaying personalized product and marketing messages to the shopper,which may easily grab the attention of the shopper.

[0023] Each network terminal may be a stand-alone unit or it may operatewith or as part of a system. When the network terminal operates with oris part of a system, the network terminal is connected directly to theretailer's computer network, or optionally connected directly to theInternet, through the built-in Ethernet Network Adapter (100-base Tstandard), using TCP/IP as the communications protocol (TCP/IP standsfor Transmission Control Protocol/Internet Protocol, and it is thestandard communication protocol used in the Internet). Each networkterminal is assigned an unique and valid IP address.

[0024] The computer at the retailer's head office remotely controls theoperations of the network terminal through an optimized set of commandsthat the computer exchanges over a control/data interface with thenetwork terminal. The commands are exchanged through the TCP/IPprotocol, and the communication is done over the internet, or over thePublic Service Telephone Network (PSTN) that connects the computer andthe network terminal with LAN modems.

[0025] The control/data interface enables, for example, the retailers tomodify and update the reward scheme of the loyalty program at any time,by sending the instructions from the sending computer to all thereceiving network terminals. In the vice versa way, a similarcontrol/data interface between the sending network terminal and thereceiving computer enables the computer to collect the shoppers'information, such as the name, age, and shopping habits, when theshopper enters the information at the network terminal.

[0026] The network terminal also include a built-in Embedded Web Server.This enables the retailers to configure the network terminal easily withany standard Web Browser application, such as the well-known MicrosoftInternet Explorer or Netscape Navigator. This embedded Web Server is oneof the major breakthrough of the invention, and is specially developedfrom scratch, that is powerful enough to handle the setup, maintenance &daily operations, yet is small & cost-effective enough to fit into anembedded system.

[0027] Multiple network terminals may be connected together under theMaster/Slave configuration. With this configuration, the retailer mayonly configure the reward scheme of the Master unit, and the rewardscheme of all the associated Slave units will be automaticallysynchronized by the Master unit.

[0028] To enable the shopper to interact directly with a networkterminal, the terminal includes a user interface and multiple data-entrydevices. The shopper supplies the data to the network terminal throughthese data-entry devices, such as the smart card reader and thetouch-screen panel. Once the network terminal reads a shopper's loyaltycard with the smart card reader, the shopper then, through the userinterface, specifies the redeemable items that he/she likes, and entersthe selections through the touch-screen panel.

[0029] The System employs two strategies to recruit participants and tocollect their personal information. First, whenever a new shopper makesthe first purchase at the store, the shopper will be issued a newloyalty card in an ad-hoc manner, without asking the shopper to fill inall the tedious application forms And the shopper may immediately startto accumulate the loyalty points and enjoy the benefits of the loyaltyprogram. On the other hand, other traditional methods often require theshopper to provide all the personal information in advance, such as thename, address, ID number, and age. These traditional approaches usuallydiscourage people to participate since people are usually reluctant toprovide the personal information. Therefore, the new approacheffectively breaks the barrier of participation, and encourage shoppersto participate.

[0030] Second, when the shopper has accumulated enough loyalty points toredeem reward items, the network terminal will first determine if theshopper's personal information has already been collected or not. Ifnot, the network terminal will ask the shopper to enter the requiredpersonal information through the network terminal's input device, whichis usually through the touch-screen panel. The information may includethe shopper's name, age, marital status, and the email address. Sincethe information is entered directly to the network terminal rather thanfilling in the application form, and since the shopper can see theimmediate benefits (i.e. to redeem the reward items), the shopper ismore willing to provide such information without all the concernsrelated to the traditional fill-in-the-form approach.

[0031] The system is suitable for small amount transactions. Unlike thetraditional paper & sticker-based loyalty card systems, the new systemuses smart cards to replace the paper cards as the loyalty cards, andthe smart cards may store any kind of amounts, including dollars andcents. This makes it practical for the retailers that deal mostly withsmall amount transactions to implement the loyalty program.

[0032] As discussed in more detail below, the Retail Loyalty System mayalso be used as a data collection system for shoppers' personalinformation and buying habits, if the retailer wants to implementCustomer Relationship Management (CRM) system on top of the loyaltysystem.

[0033] Every time when a shopper makes a purchase at the store, theassociated loyalty points will be added to the shopper's loyalty card atthe Point-of-Sales (POS) terminals at the cashier counter. Thisprocedure is done by a special POS Add-in Module through an attachedsmart card reader/writer. This special module may 20 be a hardwaremodule, or preferably be a software module that runs on the existing POSterminals.

[0034] At the same time when the POS Add-in Module adds the loyaltypoints to the shopper's loyalty card, the module also reads theinformation stored in the card, such as the shopper's personalinformation. The module will associate the shopper's information withthe items that the shopper purchased. The new information may thenoptionally be stored in a memory buffer (an internal transaction logdatabase) within the module. The information may immediately be sent tothe centralized CRM database at the head office in real time via theInternet, or may be sent by batch through the PSTN once a day,preferably at the end of the day.

[0035] Similarly, the network terminal may also be used to collectinformation for the CRM purpose. The information may include thepreference of the reward items for any particular group of shoppers.

[0036] Each loyalty card, whether it is contact-type or contactless-typesmart card, can be divided internally into different number of memoryblocks. The content of each of these blocks is encrypted and isprotected by security keys, so each block may be read and writeindependently and securely. Therefore, a single loyalty card may be usedby different affiliated companies. Each of these affiliated company mayuse one or multiple memory blocks assigned to this particular affiliatedcompany, without affecting other memory blocks that are assigned toother affiliated companies. This provides effective cross-promotionaltools between affiliated companies.

BRIEF DESCRIPTION OF THE DRAWINGS

[0037] The above and further advantages of the invention may be betterunderstood by referring to the following description in conjunction withthe accompanying drawings, in which:

[0038]FIG. 1 is a block diagram of a typical setup of a retailer withtwo branches of retail stores according to the present invention;

[0039]FIG. 2 is a block diagram of a network terminal according to thepresent invention: and

[0040]FIG. 3 is a block diagram of the POS Add-in Module according tothe present invention.

DESCRIPTION OF THE PREFERRED EMBODIMENT

[0041]FIG. 1 is a block diagram of a typical setup of a retailer withtwo retail stores 101 & 116. Three network terminals are installed inthe retail store 101 Network terminal 105 is configured as the MasterUnit. Network terminals 102 & 104 are optional, and are configured asSlave units. The three terminals are mounted on the wall in the store101, preferably in convenient places that are easily accessed byshoppers. Each network terminal has a 6.5″ touch-screen LCD display atthe top half of the unit, and a contactless smart card reader module atthe bottom half of the unit.

[0042] The network terminals are layered over the Local Area Network(LAN) 103. The connections among the network terminals 105′ 102 & 104are established via standard Ethernet wiring 123, 124, & 125, using thewell-known TCP/IP protocol.

[0043] There are also other devices connected to the LAN 103, includingthe Point-of-Sales (POS) terminal 128, and the optional computer 139,via the Ethernet connection 127 & 140 respectively, The LAN 103 is inturn connected to the Internet 109 via the Broad-Band Internetconnection 126. This connection 126 can also be a dial-up connection,and in this case, additional dial-up modems (not shown) may be required.

[0044] The display contents (i.e., the reward scheme) are identicalamong the three network terminals 102, 104 & 105. To modify the rewardscheme locally, one may use the computer 139 that runs the well-knownInternet Browser program, such as the Netscape Navigator, to access andupdate the reward scheme of the Master unit 105. The Master Unit thensynchronizes the reward scheme to the other slave units 102 & 104automatically.

[0045] When a shopper purchases something in the store 101, he/she thenpresents the loyalty card to the cashier at POS terminal 128. The smartcard reader module 107 of the POS terminal 128 reads the contents of theloyalty card, and passes the information to the POS Add-in Module 106 ofthe POS terminal 128. The POS Add-in Module 106 may be a hardwaremodule, or preferably a software module that runs on top of the existingPOS system. The module then checks the validity of the loyalty card, andto make sure this particular loyalty card belongs to this retail store.Depending on the amount spent in this purchase and the reward scheme,the module then calculates the entitled loyalty points, and notify thesmart card reader module 107 to add the loyalty points to the loyaltycard.

[0046] Optionally, the loyalty card may store the amount spent in thispurchase, along with the date & time of the purchase, and along with thename or ID of the store. The loyalty card may also keep the accumulatedamount of spending. The shopper can use this amount as an evidence ofbeing a loyal shopper, and may get additional discount/service.

[0047] The shopper then presents the loyalty card to either one of thenetwork terminals 102′ 104 & 105. The network terminal then reads theloyalty points from the loyalty card, and instantaneously display theloyalty points on the display. The network terminal then interactivelydisplay a list of the reward items redeemable by the accumulated loyaltypoints. In general, the more the loyalty points, the more the rewarditems will be shown.

[0048] The shopper then selects the reward items that he or she wouldlike to redeem with the loyalty points by touching the item ontouch-screen panel of the display. Multiple reward items may beselected. The shopper then present the loyalty card to the networkterminal again, and his/her selections will be recorded to the loyaltycard.

[0049] If this is the first time the shopper redeems the reward itemswith the loyalty card, the network terminal then asks for the shopper'spersonal information, including the age, sex, marital status, and theemail address. The shopper enters the information via the touch-screendisplay. The network terminal then writes the information back to theloyalty card, and stores the information in the internal transaction logdatabase.

[0050] To actually redeem the reward items, the shopper brings theloyalty card to the cashier at POS Terminal 128 (or other checkoutcounter not shown) again. The smart card reader 107 then reads theloyalty card and passes the information to the POS Add-in Module 106.The module then validates the loyalty card, and deduct the loyaltypoints accordingly. The Smart Card Reader Module 107 then updates theloyalty points of the loyalty card, and the shopper is then given theselected reward items.

[0051] Optionally, the POS Add-in Module 106 may record all the loyaltycard transactions in the built-in transaction database module. Theinformation may then be immediately sent to and updates the centralizeddatabase at the Centralized CRM (Customer Relationship Manager) DatabaseServer 114 in the head office 111. The connection with the CRM DatabaseServer 114 is established via the Internet broadband connection 126 &135. Alternatively, when Internet Broadband connection is not available,the connection may be established via the Public Service TelephoneNetwork (PSTN) 110. In this case, both sides may require a LAN Modem 113and 115 to establish the connections 143 and 139, and the updateprocedure is preferably done by batch once or twice daily.

[0052] To periodically readjust the reward scheme, the Computer 112 inthe Head Office 111 May be used to remotely synchronize the new rewardscheme to all the network terminals in retail stores 101 & 116. This maybe done by two approaches. First, the computer 112 may run the InternetBrowser software to connect to each of the Master units in the stores,i.e., the Network Terminal 105 of the Retail Store 101, and the NetworkTerminal 119 of the Retail Store 116, and update the reward schemecontents one by one.

[0053] The preferred approach is to update all the network terminalstogether by running a special software module (not shown) in theComputer 112. Under this approach, the Master network terminal of eachstore is to be specified first. This may be done by specifying the IPaddress of the network terminal for the broadband connection situation(such as the Network Terminal 105), or by the telephone number for thePTN connection situation (such as the Network Terminal 119). Then thedetails of the new reward scheme, such as the pictures of the rewarditems, are entered into the Computer 112. After collecting all therequired information, the Computer 112 will update all the Masternetwork terminals accordingly and automatically, under the proprietaryRetail Loyalty System (RLS) commands, which is briefly summarized in thefollowing table: RLS Commands Brief Description RLS_INIT To initializethe network terminal RLS_CONNECT To try to establish a connectionbetween the computer 112 and one of the network terminals 105 & 119, bypass- ing the IP address or the telephone number of the networkterminals to the command. RLS_SET_STATUS to set the status of thenetwork terminal RLS_GET_STATUS To get the status of the networkterminal RLS_SET_AWARD To pass a structure of a reward item, includingthe item name, the required royalty points to redeem, and the: pictureof the item in jpeg format. RLS_GET_AWARD To get the existing rewarditems one by one from the network terminal. RLS_SET_AWARD_COUNT To setthe total number of reward items RLS_GET_AWARD_COUNT To get the totalnumber of the existing reward items of the network terminal.RLS_SYNCTIME To synchronize the system time of the network terminal withthe computer RLS_SET_IDLE_CONTENT To set the display contents of thenetwork terminal during the idle time (i.e., when no one is using theunit), such as advertisements and promotion messages.RLS_GET_IDLE_CONTENT To get the existing display contents for idle time.RLS_GET_DEVICE_INFO To get the information of the network terminal, suchas the firmware version, total and free memory, and other status.

[0054] The same set of RLS commands is used for the Master NetworkTerminal 105 to synchronize the reward scheme to the Slaves NetworkTerminals 102 & 104.

[0055]FIG. 2 is a block diagram of a network terminal 200. The mainpurpose of the network terminal 200 is to feedback the existing loyaltypoints to the shopper, and to provide a convenient way to allow theshopper to redeem reward items interactively.

[0056] In general, to check the loyalty points, the shopper presents theloyalty card to the network terminal 200, with the built-in Smart CardReader Unit 203 located at the bottom half of the network terminal. TheSmart Card Reader Unit then reads the loyalty card, and passes thecontents of the card to the Core Module 201. The Core Module thendisplays the loyalty points through the Display Unit 207.

[0057] At the same time, the Core Module performs a look-up search, toretrieve the reward items stored in the Reward Items Database 212, thatare redeemable by the loyalty points. The Core Module then displays allthe redeemable reward items, and discards all the reward items thatrequire more loyalty points than the loyalty card has. The shopper thenselects the reward items that he or she would like to redeem. Theshopper inputs his/her selections through the Touch-Screen Panel Unit206, which then passes the information back to the Core Module 201.

[0058] The Core Module then reviews the contents of the loyalty card. Ifthe shopper's personal information is not available in the loyalty card,the Core Module then asks the shopper to enter the personal informationvia the User Interface Unit 205 (displayed through the display unit207). The shopper then enters the personal information via theTouch-Screen Panel Unit 206, including the Age, Gender, Number ofChildren, Martial Status, and the email address.

[0059] After the personal information is collected, the Core Module thenupdates the contents of the loyalty card, to include the personalinformation and the selected reward items. The network terminal thenasks the shopper to present the loyalty card again, and it then writesthe information back to the loyalty card via the Smart Card Reader Unit203.

[0060] Optionally, the information is saved in the Transaction LogDatabase 211, for later on uploading to the CRM Database Server 114 inFIG. 1.

[0061] The network terminal 200 may be operated as a stand-alone unit orit may operate with or as part of a system. It may be connected directlyto the computer network through the Network Interface Unit 204 bystandard Ethernet wiring. At the initial setup, an unique and valid IPaddress is assigned to the network terminal, along with other relatedsettings such as subnetmask & default gateway address. This may beaccomplished by manually entering the IP address through theTouch-Screen Panel 206, or may be assigned by a DHCP server (not shown)if available. DHCP stands for Dynamic Host Configuration Protocol, whichis a protocol that provides dynamic address allocation and automaticTCP/IP configuration.

[0062] An Internet Browser program is used to configure the networkterminal and to setup the reward scheme. The Internet Browser (notshown) is a HTTP client. HTTP stands for Hypertext Transfer Protocol,which is the communications protocol used by all World-Wide-Web servicesto retrieve information The internet Browser sends requests to theEmbedded Web Server Module 208, which receives and interprets therequests, and then notifies either the Browser-based Management Module209 and Browser-based Information Query Module 210, depending on theparticular requests. These two modules then send additional requests tothe Core Module 201, which may retrieve information from the TransactionLog Database 211 and the Reward Items Database 212. The information isthen passed back to the Embedded Web Server Module 208, for respondingto the original HTTP requests, such as showing the information on theInternet Browser.

[0063] The Internet Browser may be run on any computer platform, such asApple Matintosh, Unix machine, or PC running Microsoft Windows95/98/2000/ME/XP, the Embedded Web Server Module 208 effectively enablesplatform-independent operations. Also, the Embedded Web Server Moduleallows any number of computers to simultaneously access the networkterminal, and it eliminates the need for any dedicated computer toconnect to and access the network terminal.

[0064] As an example, when the reward scheme is needed to be readjustedand updated, a connection is first established between the InternetBrowser and the Network Terminal 200 through the Network Interface Unit204. The Internet Browser then sends the requests to the Embedded WebServer Module 208 to update the reward scheme. The new reward scheme isthen sent to the Browser-based Management Module 209, which then updatesthe Reward Items Database 212 via the Core Module 201. If the update issuccessful, the result then sends back to the Internet Browser throughthe Embedded Web Server Module 205 again, for displaying in the InternetBrowser.

[0065] The Internet Browser may also be used to retrieve the transactionLog of the Network Terminal 200. The Browser-Based Information QueryModule 210 is responsible for converting the raw data in the TransactionLog Database 211 into information that is meaningful to the users whenshown in the Internet Browser. The transaction log usually includes theshopper's personal information, and the reward items that the shopperhad redeemed.

[0066] During the idle time, the Network Terminal may showadvertisements and promotional materials with the display unit 207.Alternatively, an external monitor, such as a big TV or Plasma Display,may be connected to the Network Terminal via the External Display Unit202, to deliver the advertising materials to mass audience;

[0067]FIG. 3 is a block diagram of the POS Add-in Module 300. The mainpurpose of the POS Add-in Module is to enable the retailer to add theloyalty points of the shopper after making a purchase, and to deduct theloyalty points accordingly after redeeming the reward items.

[0068] The POS Add-in Module 300 may be implemented as a hardware unitphysically attached to the existing POS system, or preferably beimplemented as a software module that runs on top of the existing POSsystem.

[0069] After a shopper has made a purchase, the POS system then passesthe information of this purchase to the POS Add-in Module 300, includingthe date & time, and the amount spent in this transaction, through thePOS System Interface Unit 309. The POS System Interface Unit then passesthe amount to the Core Module 306, which passes the information to theLoyalty Point Management Module 311. The Module then calculates theloyalty points earned by this amount, based on the information stored inthe Reward Scheme Database 305.

[0070] The Loyalty Point Management Module then sends this earnedloyalty points to the Smart Card Reader 308, and waits for the shopperto present his/her loyalty card for the update. Optionally, thetransaction amount may be sent and updated to the loyalty card, alongwith the loyalty points.

[0071] Depending on the reward scheme, even a transaction with verysmall amount, such as a one-dollar-only transaction, may also earnloyalty points, since the loyalty card is a smart card, and is capableto storing any kind of amounts.

[0072] The Smart Card Reader Unit then returns the result to the CoreModule 306, telling the Core Module if the update has been successful ornot. The Core Module then passes this result back to the POS system viathe POS System Interface Unit 309. Optionally, the transaction may bestared in the Transaction Log Database 304, for later on uploading tothe CRM Database Server 114 in FIG. 1.

[0073] To redeem reward items, the shopper selects the items asdiscussed above in the Network Terminal. The shopper then brings theloyalty card to the POS terminal. The Smart Card Reader Unit 308 thenreads the loyalty card and determines that the shopper is to redeemreward items, then it passes the contents to the Redemption ManagementUnit 310. The unit then performs a look-up search at the Reward SchemeDatabase 305, to determine the loyalty points required for the selectedreward items, then passes the information back to the Smart Card ReaderUnit 308 to deduct the loyalty points of the loyalty card accordingly.

[0074] Similar to the Network Terminal 200 discussed, the POS Add-inModule 300 may also be accessed by Internet Browser. The physicalconnection is established via the Network Interface Unit 307. TheEmbedded Web Server Module 301 is used to receive and interpret therequests, and may pass the requests to the Browser-based ManagementModule 302 and Browser-based Information Query Module 303 to serve therequests.

[0075] It will therefore be seen that we have developed a Retail LoyaltySystem, that is cost-effective, convenient, and user-friendly, forretailers to reward shoppers for their patronage and encourage repeatpurchases. The terms and expressions employed herein are used as termsof description and not of limitation, and there is no intention, in theuse of such terms and expressions, of excluding any equivalents of thefeatures shown and described or portions thereof, but it is recognizedthat various modifications are possible within the scope of theinvention claimed. For example, the Smart Card Reader Unit 203 in theNetwork Terminal 200 can read Magnetic Card or Contact-type Smart Card,rather then the Contactless-type Smart Card under the preferredembodiment.

[0076] Also, the Display Unit 207l is provided by a 6.5″ LCD display.However, alternatively other display devices, such as CRT monitor, canbe used instead.

[0077] Furthermore, although the preferred embodiment uses the LAN modem113 and 115 to establish the connection between the Network Terminal 119at the Retail Store 116 and the Computer 112 at the Head Office 111, anormal dial-up modem, a wireless LAN device, or any other data interfacedevice can be used.

[0078] In another embodiment, with moderate modifications, the samesetup may be used as a pre-paid system. The Network Terminal 200 may beused to display the balance of the stored value in the pre-paid card,while the POS Add-in Module may be used to add and deduct the value ofthe card.

What is claimed is:
 1. A first Retail Loyalty System Network Terminal,for shoppers to conveniently and interactively check the loyalty pointsand select the reward items, the first network terminal comprising: a) anetwork interface for connecting directly to the computer networkinfrastructure establish a connection to the company network and/or tothe Internet, b) an Embedded Web Server that receives and responses tothe requests sent from any Internet Browser having access to thecomputer network, c) a browser-based management module that allows anyInternet Browser that is capable of accessing the computer network tosetup and maintain the network terminal, d) a browser-based informationquery module that allows any Internet Browser that is capable to accessthe computer network to access the transaction log of the networkterminal.
 2. The network terminal defined in claim 1, wherein theEmbedded Web Server enables different kind of computers, such as AppleMacintosh, Unix Machine, or PC running Microsoft Windows95/98/2000//ME/XP, to connect to and to access the network terminal, andto setup, and maintain the reward scheme of the network terminal,through the standard Internet Browser, i.e., it enablesplatform-independent operations.
 3. The network terminal defined inclaim 1, wherein the Embedded Web Server allows any number of computersto simultaneously access the network terminal.
 4. The network terminaldefined in claim 1, wherein the Embedded Web Server enables remotecomputers to perform remote access from remote sites through standardInternet Browser.
 5. The network terminal defined in claim 1, whereinthe Embedded Web Server eliminates the needs for any dedicated computerto connect to and to access the network terminal.
 6. The networkterminal defined in claim 1, wherein the Browser-based management moduleincludes the management software, that enables the Internet Browser tosetup and maintain the network terminal and to readjust the rewardscheme.
 7. The network terminal defined in claim 1, wherein theBrowser-based management module includes the management software, thateliminates the needs for any additional management software package tosetup and maintain the network terminal and to readjust the rewardscheme.
 8. The network terminal defined in claim 1, wherein theBrowser-based information query module includes the software to accessthe transaction log data base, that can dynamically generate real-timetransaction log report from the transaction log records.
 9. The networkterminal defined in claim 1, wherein the Browser-based information querymodule allows users to access the transaction log through standardInternet Browser.
 10. The network terminal defined in claim 1, thatimplements the proprietary RLS protocol, to allow the synchronization ofthe reward scheme between Master network terminal and Slave networkterminal automatically without user interface.
 11. The network terminaldefined in claim 1, further comprising a Display Unit that shows theloyalty program-related information, such as the loyalty points, theaccumulated amount spent in the store, the history of spending, and thereward items.
 12. The network terminal defined in claim 11, wherein theDisplay Unit displays advertisements and promotional materials, ineither still picture format or in movie format, during the idle timewhen no shopper is using the unit.
 13. The network terminal defined inclaim 11 wherein the Display Unit displays personalized product andmarketing messages to the shopper for personalized promotion.
 14. Thenetwork terminal defined in claim 1, further comprising a Touch-ScreenPanel Unit, that acts as an input device to allow the shopper tointeractively select the reward items.
 15. The network terminal definedin claim 14, wherein the Touch-Screen Panel Unit allows the shopper toenter his/her personal information, such as age, martial status, emailaddress, and so on.
 16. The network terminal defined in claim 1, furthercomprising a Transaction Log Database that stores the transactionhistory that can be used for CRM (Customer Relation Management)purposes.
 17. The network terminal defined in claim 1, furthercomprising a Reward Scheme Database, that enables the reward scheme tobe changed and readjusted easily from time to time, to adapt for anyproduct specific promotion, seasonal campaigns and time-sensitivepromotion.
 18. The network terminal defined in claim 1, furthercomprising a Smart Card Reader Unit that reads and writes the contentsof the loyalty card (either contact-type or contactless-type smartcard).
 19. A first POS Add-in Module that works with any existing POS(Point of Sales) system, comprising: a) network interface for connectingdirectly to the computer network infrastructure establish a connectionto the company network and/or to the Internet, b) an Embedded Web Serverthat receives and responses to the requests sent from any InternetBrowser having access to the computer network, c) a browser-basedmanagement module that allows any Internet Browser that is capable ofaccessing the computer network to setup and maintain the networkterminal, d) a browser-based information query module that allows anyInternet Browser that is capable to access the computer network toaccess the transaction log of the network terminal.
 20. The POS Add-inModule defined in claim 19, that implements the proprietary RLSprotocol, to allow the synchronization of the reward scheme with thenetwork terminal defined in claim
 1. 21. The Add-in Module defined inclaim 19, further comprising a POS system interface unit that sends andreceives the loyalty program-related information, such as thetransaction amount and loyalty points, with the POS system.
 22. The POSAdd-in Module defined in claim 19, further comprising a Transaction LogDatabase that stores the transaction history that can be used for CRM(Customer Relation Management) purposes.
 23. The POS Add-in Moduledefined in claim 19, further comprising a Smart Card Reader Unit thatenables the POS system to access the loyalty card (either contact-typesmart card or contactless-type smart card), and to add and deduct theloyalty points of the loyalty cards.
 24. The POS Add-in Module definedin claim 19, further comprising a Redemption Management Unit thatdetermines the loyalty points required to redeem the reward items. 25.The POS Add-in Module defined in claim 24, wherein the RedemptionManagement Unit passes the loyalty points to the Smart Card Reader Unitfor deducting the loyalty points of the loyalty card.
 26. The POS Add-inModule defined in claim 19, further comprising a Loyalty PointManagement Unit that determine the loyalty points earned by the purchasetransaction.
 27. The POS Add-in Module defined in claim 26, wherein theLoyalty Point Management Unit passes the earned loyalty points to theSmart Card Reader Unit for adding the loyalty points to the loyaltycard.
 28. A method of implementing a Retail Loyalty System that caneffectively recruit participants, and to collect shoppers' personalinformation for CRM (Customer Relationship Management) purpose, a methodcomprising the steps of: a) issuing a loyalty card (either acontact-type smart card or contactless-type smart card) to every newshopper at their first visit, without asking for personal information inadvance; b) the shopper may earn loyalty points even at their firstvisit to the store: c) the shopper may remain anonymous until the firsttime he or she redeems reward items, d) after selecting the reward itemsto redeem the first time via the Network Terminal defined in claim 11the Network Terminal then asks for the personal information, such asage, sex, marital status, and number of children. e) once the personalinformation is entered, it is then stored in the loyalty card, and canbe retrieved at the next purchase. f) the personal information of theshopper then can be associated with the purchased items for CRMpurchases.
 29. A method of implementing a Retail Loyalty System that caneffectively create and sustain customer loyalty and repeat purchases, amethod comprising the steps of: a) enabling the shopper to earn loyaltypoints for all purchase transactions, even the transaction amount isminimal; b) adding the loyalty points on-the-fly to the loyalty card(either contact-type or contactless-type smart card) in real-time mannerwithout asking the shopper to fill in any form in advance; c) allowingthe shopper to check the loyalty points with real-time feedbackconveniently by simply presenting the loyalty card to the NetworkTerminal defined in claim 1, without any need for store assistance; 30.A method of implementing a Retail Loyalty System that can reduce thesetup and maintenance cost for the retailers, a method comprising thesteps of: a) avoiding the centralized database to store all theshoppers' transaction history and loyalty points, by storing the loyaltypoints in their own loyalty card; b) avoiding the setup and maintenanceof the customer hot line for the shoppers to check the loyalty pointsthrough the telephone, as the shoppers can check the loyalty points ontheir own at the store level and get real-time feedback by simplypresenting the loyalty card to the Network Terminal defined in claim 1;c) allowing periodically readjusting the reward scheme in web-speedconveniently via the Internet;
 31. A method of implementing a RetailLoyalty System that can be used among affiliated retailers, a methodcomprising the steps of: a) dividing the memory of the loyalty card(either contact-type or contactless type smart card) into a number ofsub-blocks, and each sub-block is allocated to one of the affiliatedretailers, and is protected by secret keys; b) each one of theaffiliated retailers reads and writes on their allocated sub-blocks ofthe loyalty card only, without affecting and altering the othersub-blocks that are not allocated to the retailer.